trade cycle

The Dirt On Fertilizer

WHERE IT’S GOING, WHY, AND HOW IT GETS THERE

The world is projected to add another 80 million humans this year, pushing its population to 8.3 billion. If history is any guide, those folks are going to need smartphones, updates regarding zombies and/or Kardashians (redundant) and food. With climate change producing wacky weather patterns (actual scientific term) and a catastrophic drought in one of the world’s great agricultural producing regions—California—being able to continue producing more food efficiently is critical to survival. Doing so with the same or less land means fertilizer will play a critical role. Here’s the straight dirt on fertilizer…

According to PotashCorp, the world’s largest fertilizer company, global consumption of fertilizer will increase by about 2 percent annually for the next decade in large part due to two factors: increased demand in the developing world that is, well, developing; and shifting/rising expectations, incomes and dietary patterns in the world’s two most populous countries.

Production of fruits and vegetables has been rising significantly in China since the turn of the century—an average of 5 percent annual growth—in part due to China’s ever-growing population and its fast-growing middle class and its improving dietary palate. About a third of all fertilizer now used in China is used on fruits and veggies which require more nutrients per acre than most other crops. For similar reasons, fertilizer use has also increased in India, where fruit and vegetable production has doubled in the past 20 years.

Fertilizer is not only critical to the world but unique in global commerce, since it is needed in virtually every country and region, making it one of the most exported and imported commodities in the world.

There is no standard kind of fertilizer but it always contains three macro-nutrients: nitrogen which encourages leaf growth; phosphorus which is key in the development of roots, flowers, seeds and fruits; and potassium (potash) which is important in stem growth, movement of water in plants and promotion of flowering and fruiting.

Canadian-based PotashCorp maintains five potash mines in Saskatchewan and New Brunswick, two phosphate mines and three nitrogen facilities in the U.S. along with a nitrogen complex in Trinidad.

Each of the three nutrients is treated and traded as a separate and distinct commodity sector. For instance, Russia is the largest exporter of nitrogen, the United States its largest importer. The U.S. is the largest exporter of phosphate, its biggest markets being India, Brazil and Canada.

Components—both dry and liquid—are shipped separately and how they and other ingredients (copper, iron, manganese …) are mixed at storage facilities determines the type of fertilizer. Though it is destined to literally be cast on the ground, the mixing of those components must be done with precision. A short YouTube shows how Florida-based specialty fertilizer manufacturer Harrell’s custom mixes sometimes as many as 175 ingredients together with the same meticulous care given to measurement as any soufflé chef, except using front loaders.

The largest U.S. ports exporting fertilizer include, on the West Coast, Port of Hueneme, where fertilizer giant Yara North America—a division of Norwegian-based Yara International—operates a 9.3 million gallon tank farm to distribute fertilizer, and Port of Stockton, where Yara operates a bulk dry fertilizer storage and distribution facility capable of storing 80,000 tons.

On the East Coast, Port Tampa Bay is one of the largest fertilizer exporting ports in the world. The port estimates that more than 43,000 jobs are related to fertilizer activities there.

Many of those jobs have to do with safety since fertilizer and its components are some of the most volatile to transport and store. The worst industrial explosions in American history both involved fertilizer: the Texas City explosion of 1947 which killed at least 581 people and the West Fertilizer Company explosion of 2013 which killed 15, injured 160 and destroyed or damaged 150 buildings.

In both cases, ammonia nitrate, a key ingredient in fertilizer, was the explosive material. Ammonia nitrate is so powerful that the Texas City explosion is considered the biggest non-nuclear explosion in history and the reason that fertilizer components are among the most monitored and regulated on Earth.

Of course, that doesn’t mean you can catch every fertilizer-related catastrophe. Consider St. Edward High School in Illinois, where the grounds crew mistook weed killer for fertilizer and methodically went about killing its football field. “We’re certainly not going to win any grass beauty pageants,” a school official quipped. Maybe not, though they may think about declaring the New England Patriots cheaters; worked for Miss America.